Why Elon Musk Believes AI Robots Will Be His Biggest Product Ever

When Elon Musk speaks, the market listens. Sometimes with skepticism, sometimes with awe, but in this case, we find ourselves cautiously agreeing. What he calls the biggest product ever isn’t just a bold prediction, it’s a fast approaching reality: the rise of the AI-powered humanoid robot in 2025 and beyond.

The Role of Artificial Intelligence

The revolution begins with Artificial Intelligence. Two years ago, we were already discussing it during our seminars and webinars, when for many it was still an abstract concept. Today, nearly every office worker uses AI-powered tools like ChatGPT in their daily routines.

AI is transforming jobs, not just for lower-skilled workers, but also for highly educated professionals. Many roles are becoming more productive or even entirely obsolete thanks to smart software and automation. For investors, this is a trend that demands serious attention.

Three Key Sectors Within AI

We can distinguish three major sectors at the heart of this digital revolution:

1. Hardware, The Engine Behind AI
Chips are the foundation of AI, as without semiconductors, there is no artificial intelligence. ASML (ASML:xams) is a shining example of European tech strength. For global exposure, Exchange-Traded Funds (ETFs) like the VanEck Semiconductor UCITS ETF (SMH:xmil) provide access to leading chipmakers, with the benefits of diversification, liquidity, and low fees.

2. Infrastructure, The Explosive Growth of the Cloud
All that data has to live somewhere, from your WhatsApp messages, smart home devices, web searches, all are stored in vast data centers. Cloud computing is booming and demands serious investment in infrastructure. Targeted ETFs like the Global X Cloud Computing ETF (CL0U:xetr) provide access to this trend.

3. Cybersecurity Becomes Critical
The more data we generate, the greater the risk. Cybersecurity is now a formal part of NATO policy. Data protection is becoming just as important as physical defense. ETFs like the First Trust Cloud Computing UCITS ETF (SKYE:xams) focus on companies like Palantir (PLTR:xnas) and CrowdStrike (CRWD:xnas) that lead in this area.

If you are interested in learning more about value investing opportunities hidden among overvalued tech sector stocks, we recommend you see our analysis on Semiconductor Giant TSMC: Is It Still A Buy?

The Humanoid Robot

Elon Musk recently unveiled Tesla’s Optimus robot. Self-driving taxis barely made headlines anymore, but when 30 humanoid robots took the stage and started pouring beers, the world started paying attention. And we believe this attention is deserved, as Musk believes this market could be 25 times bigger than Tesla’s current business. Nvidia’s CEO shares this vision. This is no longer science fiction.

The humanoid robot is designed to be general purpose, bipedal, autonomous, and can handle tasks that are dangerous, repetitive, or tedious. These robots move more fluidly than humans, can learn, communicate, and work. Think of applications in manufacturing, household support, security, and even healthcare. Musk aims to scale production to tens of thousands of units per year, with a target price of $30,000 each.

Investing in Robotics and AI

We are witnessing the dawn of a new industrial revolution powered by AI and AI-related services and infrastructure. That brings opportunities, but also calls for awareness and a healthy dose of caution. But what should you focus on, as an investor?

• Manufacturing: Companies building the robots themselves, such as Tesla (TSLA:xnas).
• Components: Firms producing the underlying hardware, especially semiconductors and sensors, such as chip giants ASML (ASML:xams), TSMC (TSM:xnas), and designers like Nvidia (NVDA:xnas).
• Cybersecurity: Firms offering a critical layer of protection in these interconnected systems, such as Palantir (PLTR:xnas), Palo Alto Networks (PANW:xnas), Cisco (CSCO:xnas), and CrowdStrike (CRWD:xnas).
• Cloud and Infrastructure: Everything the robot learns, stores, and shares must be handled securely and efficiently by firms such as Amazon (AMZN:xnas), Microsoft (MSFT:xnas), Google (GOOGL:xnas), and other data center providers such as Equinix (EQIX:xnas) and Digital Realty (DLR:xnys).

China is also a major player. Four out of the five largest robot manufacturers globally are Chinese, although only Xiaomi (01810:xhkg) is publicly listed. ETFs focused on Chinese tech firms could be worth considering.

We see interesting opportunities for value investors in Chinese technology firms that have been long ignored by western investors. If you are interested in learning more about value investing opportunities in the Chinese market, we recommend you see our analysis on Chinese Stocks: A Value Play?

Don’t Forget Energy

AI and robotics are energy-intensive. A single search query already consumes as much power as 12 minutes of laptop usage. Global energy demand is rising by at least 3% per year, and that’s likely an underestimate.

Investing in energy is back on the table. Uranium and nuclear energy are making a comeback. ETFs like the Global X Uranium UCITS ETF (URNU:xetr) or the VanEck Uranium and Nuclear Technologies UCITS ETF (NUKL:xetr) can help balance energy exposure in your portfolio. Interesting new players such as the small cap Nano Nuclear Energy (NNE:xnas) and Constellation Energy (CEG:xnas), have been receiving increasing attention from investors, especially after the latter signed a deal with Meta (META:xnas) to supply nuclear energy and power its data centers for training AI models.

Conclusion: Don’t Underestimate It

Humanoid robots are no longer just a hype or gimmick, they’re becoming real, and fast. The investment opportunities are massive, but so are the ethical and societal considerations. Smart investors are already looking ahead.

We believe that even a skeptical investor may be prudent to consider investing in robotics and AI through ETFs available to trade on our platforms.

Will Elon Musk be proven entirely right? We’ll know in a decade. But waiting that long might be too late.

If you are interested in investing in robotics and AI, but are concerned about the high valuations of US tech stocks, we recommend you see our analysis on investing in Artificial Intelligence (AI), and whether it represents a bubble or not?

If you’re unsure how to invest in robotics and AI and AI-related sectors whilst minimizing your risk and maximizing your return, or unsure how to trade the above-mentioned instruments on our trading platforms, we’re here to help, feel free to contact us. In times like these, a sound strategy is your best defense.

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